Mooniswap Crypto Exchange Review: How It Boosts Liquidity Provider Earnings

Most crypto traders know Uniswap. But if you're supplying liquidity to decentralized exchanges, you’re probably leaving money on the table. Mooniswap isn’t just another DEX-it’s a smarter way for liquidity providers to earn more by turning arbitrage profits into your income.

What Makes Mooniswap Different?

Mooniswap launched in August 2020 as a project from the 1inch team, built on Ethereum and designed to fix a core problem in AMMs: arbitrageurs stealing profits from liquidity providers. Unlike Uniswap, where price changes happen instantly after every trade, Mooniswap uses a delayed price update system called virtual balances.

Here’s how it works: when someone swaps tokens, the price doesn’t update right away. Instead, the system holds the new rate in a virtual balance for about five minutes. During that window, arbitrage bots have a harder time jumping in and exploiting the price gap. The profit they would’ve made? It stays inside the liquidity pool.

This small delay is the key. While Uniswap V2 lets arbitrageurs capture nearly all slippage revenue, Mooniswap redirects it back to liquidity providers. According to internal simulations by the 1inch team, this boosts earnings by 50% to 200% compared to Uniswap V2. That’s not theoretical-it’s backed by real trading data from the Ethereum network.

How Liquidity Providers Earn More

If you’re supplying ETH and USDC to a pool on Uniswap, you earn a share of the 0.3% trading fee. On Mooniswap, you earn that same fee-but you also get a slice of the slippage revenue that would’ve gone to bots.

For example, if a trader swaps 10,000 USDC for ETH and the price moves 2% during the trade, Uniswap lets the arbitrageur buy low and sell high, pocketing the 2%. Mooniswap delays that price adjustment. The arbitrageur still acts, but the price they see is still close to the old rate. Their profit shrinks-and the difference gets added to your pool.

This isn’t magic. It’s economics. By making arbitrage less profitable, Mooniswap turns a cost for liquidity providers into a revenue stream. The protocol doesn’t charge extra fees. It just redistributes what was already being lost.

How Mooniswap Compares to Uniswap

Comparison: Mooniswap vs Uniswap V2

Feature	Mooniswap	Uniswap V2
Price Update Speed	Delayed (5-minute virtual balance window)	Instant
Liquidity Provider Earnings	50-200% higher than Uniswap V2	Standard 0.3% fee only
Arbitrage Profit Capture	Redirected to liquidity pools	Kept by arbitrage bots
Fee Structure	Flexible; up to 5% can go to integrators	Fixed 0.3%
Gas Costs	Same as Uniswap (Ethereum network fees)	Same as Mooniswap
Wallet Required	MetaMask, WalletConnect, etc.	Same

For traders, the delay might feel like slower execution. But for liquidity providers, it’s a game-changer. You’re not just earning fees-you’re earning from the very inefficiencies that hurt other AMMs.

How to Use Mooniswap

Getting started is simple if you’ve used any DeFi platform before:

1. Connect your wallet (MetaMask, Coinbase Wallet, or any EVM-compatible wallet).
2. Make sure you have enough ETH to cover gas fees-usually $5-$15 depending on network congestion.
3. Go to the Mooniswap interface and choose “Trade” to swap tokens or “Add Liquidity” to earn fees.
4. When adding liquidity, you’ll receive LP tokens. These represent your share of the pool and are burned when you withdraw.

No KYC. No deposits. No middleman. Your funds stay in your wallet at all times. That’s the DeFi promise-and Mooniswap delivers it without the fluff.

Who Should Use Mooniswap?

Mooniswap is best for:

• Liquidity providers who want higher returns than Uniswap
• Traders who don’t mind a 5-minute delay in price updates
• Users already in the 1inch ecosystem (who can use 1INCH tokens for discounts)
• Those comfortable with Ethereum gas fees and self-custody

It’s not ideal for:

• New crypto users unfamiliar with wallets or gas fees
• Traders needing instant execution (e.g., high-frequency arbitrage)
• Anyone trading on chains other than Ethereum

If you’re serious about earning from DeFi, Mooniswap is one of the few protocols that actually pays you for doing the right thing-providing liquidity. Most platforms just take your tokens and charge fees. Mooniswap lets you profit from the system’s own friction.

Limitations and Risks

No system is perfect. Mooniswap’s biggest downside? Liquidity depth. Compared to centralized exchanges or even Uniswap, Mooniswap’s pools are smaller. That means larger trades can still cause slippage-even with the virtual balance system.

Also, if you’re trying to arbitrage yourself, the 5-minute delay means you won’t get the fastest prices. You’re competing with bots that have better tools and faster connections. For most users, that’s fine. For professional arbitrageurs, it’s a barrier.

And like all Ethereum-based protocols, you’re at the mercy of network congestion. During peak times, gas fees can spike above $50. That’s not Mooniswap’s fault-but it’s a reality of using DeFi on Ethereum.

The Bigger Picture: Mooniswap in DeFi

Mooniswap isn’t just a DEX. It’s a proof of concept for a new kind of economic design in DeFi. Instead of treating arbitrage as a necessary evil, it turns it into a revenue engine. This idea has influenced other protocols, and even Uniswap has explored similar concepts in later versions.

It’s also tightly integrated with the 1inch DEX aggregator. If you use 1inch to find the best price across multiple exchanges, you’re already interacting with Mooniswap’s underlying tech. The 1INCH token can be used for fee discounts on both platforms, creating a sticky ecosystem.

The team has hinted at reducing fees to 0% in the future. That’s bold. Most DEXes charge fees to survive. Mooniswap might survive by making liquidity provision so profitable that users stay even without fees.

Final Thoughts

Mooniswap doesn’t try to be everything. It doesn’t offer fiat on-ramps, margin trading, or NFT swaps. It focuses on one thing: making liquidity provision more profitable. And it does it better than anyone else.

If you’re supplying liquidity to any AMM, you owe it to yourself to test Mooniswap. The difference in earnings isn’t small-it’s dramatic. You’re not just swapping tokens. You’re participating in a smarter financial system.

It’s not for everyone. But if you understand DeFi basics and want to earn more from your crypto, Mooniswap is one of the most compelling options on Ethereum today.